Data Sheet—Monday, May 23, 2016

Every morning, my email inbox is replete with article pitches and interview offers. I typically archive the ones overflowing with marketing jargon for a rainy day, but over time the recurrence of certain phrases gives me pause. Here’s one that has been bouncing around my brain for months: “customer experience management.”

As far as I can determine, the broad goal of customer experience management (not to be confused with customer relationship management, which focuses on nurturing sales prospects) is to get every employee from call-center staff to senior executives listening more closely to what customers are saying. The goal: serve them better, which (by the way) should lead to more sales, new product ideas, etc.

Most companies already spend a lot of time worrying about what their customers think, through surveys or transcripts of support calls—indeed, a recent Forrester Research study suggests almost 85% of businesses regularly gather feedback after some sort of interaction or encounter. But very few of them actually use that information systematically to improve interactions or, gasp, to develop new products. Nor do they consider all the unsolicited “feedback” that companies now receive through social media as part of the mix.

That’s a mistake, according to Sequoia Capital partner Doug Leone, who last July led a $150 million investment in one of the better-known software companies in this space, 15-year-old Medallia. “A happy customer can do you a world of good, an unhappy customer can do you a world of damage,” he told me earlier this month.

Since the Medallia funding, the pressure on companies to become more customer-centric has only intensified. This is far easier said than done, but apparently more companies are determined to try harder. “There is a large and growing population of companies focused on this issue,” said Robert Wollan, senior managing director for Accenture Strategy, who runs a consulting practice focused on customer strategy.

Accenture is one of more than a dozen global professional services firms that use Medallia’s cloud software to build systems for gathering, analyzing, and sharing customer feedback more in a more consistent way.

Medallia formalized its alliance program in early May, in part so it could support larger installations of its software. Medallia said it generated more than $125 million in revenue for its last fiscal year, and companies as diverse as Delta Air Lines, Sherwin-Williams, and Nordstrom use its software to guide interactions. Some of Medallia’s first customers were hotels. La Quinta, for example, used Medallia to successfully research and launch a $20 million overhaul of its breakfast menu and services.

How much are businesses willing to pay for software and services that could help make employees more empathetic to customer needs? One forecast sizes the market at $10.8 billion by 2020, which is more than double what companies spent last year. “Everybody has a screen, the whole company can react to this feedback,” Leone said. “That, by definition, changes you.”

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BITS AND BYTES

Xerox will seek two new CEOs after it splits. Ursula Burns, the first black woman to be CEO of a Fortune 500 company, won't lead day-to-day management for either of the two businesses created by the split-up of the two companies later this year. She will, however, become chairwoman of entity focused on printer, copiers, and document technologies. (New York Times)

Xiaomi barely grew last year. The Chinese smartphone company generated approximately $12.5 billion in revenue last year, according to comments by a spokesperson. That represents growth of about 5% for the company, which is the world's second most valuable startup with a valuation of about $45 billion. (Fortune)

Avaya may be for sale. TPG Capital and Silver Lake Partners (the private equity firm backing Dell's takeover of EMC) have hired investment bank Goldman Sachs to find a buyer for the telecommunications equipment company, reports Reuters. Avaya was part of Lucent Technologies. It went private in October 2007, after seven years as an independent public company. Avaya is still laden with $6 billion in debt, which is one motivation for a sale. (Reuters)

IBM starts another round of layoffs. Even though the company has more than 20,000 open positions posted, it is consolidating offices and eliminating jobs that don't align with its focus on cloud services and business analytics. The last round of layoffs, in March, affected an estimated 5,000 workers, reports The Wall Street Journal. The restructuring could ultimately affect up to 14,000 positions. (Wall Street Journal)

Upstart Clover Health raises $160 million. The health insurance company uses data analytics technology to suggest preventative care options for its customers, with the idea of keeping treatments costs at a minimum. Clover caters to seniors who use the Medicare Advantage, which allows them to work with private insurers. The new funding led by Greenoaks Capital is one of the biggest rounds yet for the health-tech sector, bringing Clover's total funding to $285 million. (Fortune)

THE DOWNLOAD

This software helps take stock of your stock. These days, software can give helpful feedback in almost real time about nearly everything businesses do like whether sales teams are on track to meet their goals.

Increasingly, companies are seeking this same sort of information about their manufacturing and distribution. These so-called “supply chain analytics” aren’t exactly a new concept—nearly 70% of executives surveyed by Accenture in 2014 described them as a priority—but the cost has thwarted them from gaining widespread adoption. That’s why interest in cloud services that can make sense of the data more quickly is growing. (Fortune)

IN CASE YOU MISSED IT

Google's Project Ara modular phone launches next year by David Z. Morris

HBO's 'Silicon Valley' tackles an uncomfortable topic by Kia Kokalitcheva

Energy-storing train gets Nevada approval by David Z. Morris

How driverless cars can shrink America's income gap by John Moavenzadeh

Here's why the blockchain powers prosperity by Alex & Don Tapscott

ONE MORE THING

Twitter won't reprice stock options without permission. In a securities filing, the social media company said it will ask shareholders before reducing the price of employee stock options. CEO Jack Dorsey is still pushing his plan to donate 6.8 million shares to employees, a proposal that will be considered at the company's annual meeting this week. (Recode)